One of my readers sent me an email a few weeks ago and asked me if the cryptocurrency mining stocks are worthwhile to buy, and I was so intrigued at the question that I started right away to find out if there is any sense at all for purchasing those big mining operators stocks. Here is the result, I'm sorry this was the best I could do in a few week's notice, but I hope it finds some interest in you.
I took five companies in the stock market and started to research their data and made my calculations after, and I DID some radical actions after it.. )
Bitfarms Ltd
Bitfarms Ltd is a cryptocurrency mining company in North America. Operations go through two different segments, Backbone and Volta. The Backbone is the owner and operator for separate server farms, primarily validating transactions on the blockchain and earning coins from block rewards and transaction fees. The Volta side is electricity service to commercial and residential customers in Canada. It has five server farm units that mine different types of cryptocurrencies. Bitfarms Ltd was established in 2017, and its headquarter is in Canada, in the city of Toronto.
Ticker: BITF
Exchange: TSXV
Stock Price: 0.39 CAD
Market Cap: 33.0m CAD = 25.17m USD
Debt: 15.6m USD (March 2020)
Mining:
Hash power: 813 PH/s
Energy consumption: 56.8 MW
Watts per 1 TH/s: 70 kW
Machines:
29,000 ASIC miners spread across five facilities
1,865 WhatsMiner M20S
1,000 WhatsMiner M31S+
Q2 2020 Financial Summary and Corporate Highlights
Consolidated revenue of US$7.4 million; gross loss of US$0.1 million (-2% gross loss margin), operating loss of US$1.5 million (20% operating loss margin), and a net loss of US$3.7 million,
Mining operations gross mining profit of US$2.5 million (36% gross mining margin).
US$0.4 million EBITDA (6% EBITDA margin) and US$1.4 million Adj. EBITDA (19% Adj. EBITDA margin).
815 Bitcoins mined with an average break-even Bitcoin price of $5,075.
The company completed 5MW expansion of the Company's St-Hyacinthe facility to increase the maximum capacity at St. Hyacinthe from 10 megawatts ("MW") to 15 MW.
More highlights:
Own electricity: 100% owned electrical contractor, Volta Electrique (160 megawatts hydroelectricity)
Electricity price 0.04/kWh USD
Total assets: 47,654M USD, Total liabilities: 24,256M USD, Total equity: 23,398M USD
Price to Book (PB) ratio 1.08x.
The debt to equity ratio (68.8%) is considered high.
25.17m USD market cap with 813000 TH/s.
price for 1 TH/s is 30.96$
Marathon Patent Group
Marathon Patent Group, Inc says that it is a digital asset technology company that mines cryptocurrencies. It owns all the mining machines it uses and also a data center in Canada. The Companys's name was before American Strategic Minerals Corporation, but it changed its name to Marathon Patent Group in February 2013. The company was founded in 2010, and its headquarter is in the USA, Las Vegas.
Ticker: MARA
Exchange: Nasdaq
Stock Price: 2.09 USD
Market Cap: USD 67.2m
Debt: 1.12M (2019 Annual Financials)
Mining:
Hash power: 186 PH/s (will be 1155 PH/s in June 2021)
Energy consumption:?
Watts per 1 TH/s:?
Machines:
700 M31S+ ASIC Miners from MicroBT
10,500 S19 Pro Antminers
Q1, 2020 results:
Marathon Patent Group's revenue was $592k during the three months ended March 31, 2020, compared to $231k during the three months ended March 31, 2019. the increase was 157%.
Operating loss was approximately $1.1 million for the quarter ended March 31, 2020, compared to an operating loss of roughly $1 million (inclusive of non-cash costs) for the quarter ended March 31, 2019.
Net loss per share was 0.12$ per basic and diluted share for the quarter ended March 31, 2020.
Net money used in operating activities was approximately $1.1 million in the quarter ended March 31, 2020.
They had around $0.5 million of cash and equals as of March 31, 2020. Subsequently, the company raised $5.5mm from significant ATM, purchased $3mm of new mining equipment, and has $2.3mm cash.
The company's Long-Term Debt will be zero.
More highlights:
Intent to get 208 PH/s mining power by acquiring Fastblock Mining in All-Stock Transaction.
Additional miner installations are increasing total production to 296 PH/s before year's end.
June 2021, the addition of 10,500 S19 Pro Antminers will increase the Company's Hashrate production by 1,155 PH/s.
67,2m USD market cap with 1155000 TH/s (June 2021 power).
price for 1 TH/s is 58.20$
Riot Blockchain Inc.
Riot Blockchain, Inc., together with its many subsidiaries, build, support, and operate the Blockchain technologies infrastructure. It is involved in a cryptocurrency mining operation, which uses special computers that produce cryptocurrencies, mainly focused on bitcoin. Riot Blockchain also has different activities, including trading on digital currencies, accounting, auditing, and verification operations. It also develops TessPay, a payments ecosystem, and other blockchain solutions for the technology sector. In December 2019, around 7,400 of the miners were operating. The company changed its name from Bioptix, Inc to Riot Blockchain, Inc. in October 2017. The company was found in 2000, and its headquarters is in Colorado, the city of Castle Rock.
Ticker: RIOT
Exchange: Nasdaq
Stock Price: 3.16 USD
Market Cap: 147.4m USD
Debt: 368,000 (2019 Annual Financials)
Mining:
Hash power: 357 PH/s (will be 2,007 PH/s in June 2021)
Energy consumption: 16.3 MW (64 MW in June 2021)
Watts per 1 TH/s: 35.7 kW (in June 2021)
Machines:
6040 Bitmain S17 Antminer
1000 Bitmain S19 Antminers
13100 Bitmain S19 Pro Antminers
Q2 2020 highlights:
Riot Blockchain mined 227 bitcoins in Q2 of 2020, down 28% from 2019 when Riot reported 316.19 mined bitcoins. In 2019, Riot switched to mining bitcoin exclusively, said Jeff McGonegal, CEO of Riot Blockchain. Previously, the company also mined litecoin and bitcoin cash.
Quarterly mining revenue from mining was $1.9 million, down nearly 20% from a year ago when the company reported $2.4 million in quarterly mining revenue.
"We're strong believers in the macroeconomic fundamentals underlying bitcoin," McGonegal said in email correspondence with CoinDesk.
Riot reported a current mining capacity of 357 petahash per second, up more than 250% from 101 petahash per second last year.
Despite an increase in mined bitcoin and the cryptocurrency's more-than-200% rally from March lows, Riot's cash and cryptocurrency corporate liquidity dropped $18 million last year to $16.4 during the June 2020 quarter.
More highlights:
Riot has 1,000 more S19 Pros scheduled for install in November 2020, increasing hash rate capacity to 566 PH/s utilizing approximately 19.7 MW of energy.
They also have 8,000 S19 Pros scheduled for delivery in equal installments over the first four months of 2021. By early May 2021, we are looking to have a total hash rate capacity of 1.45 EH/s (1,446 PH/s) while utilizing approximately 46 MW of energy.
Riot Continues massive operational growth and Sets Path to 2 EH/s Hash Rate Capacity with Over 20,000 Miners Deployed by June 2021.
147,4m USD market cap with 2000000 TH/s (June 2021 power).
price for 1 TH/s is 73.7$
Hut 8 Mining Corp.
The company operates as a cryptocurrency mining farm in Canada. It is involved in industrial-scale bitcoin mining. It also runs and owns 38 BlockBox AC data centers in Alberta, and 56 BlockBox AC data centers in Medicine Hat, Alberta. Headquarters are in Canada, Quebec.
Ticker: HUT
Exchange: TSX
Stock Price: 0.97 CAD
Market Cap: 94m CAD = 71.71m USD
Debt: 19.81M (2019 Annual Financials)
Mining:
Hash power: 952 PH/s
Energy consumption: 107 MW
Watts per 1 TH/s: 112.35 kW
Machines: ?
2019 financial results highlights:
Annual revenue of $82.0 million.
They mined 8,618 bitcoin
Profit margin of 45%
Adjusted EBITDA of $33.5 million with an Adjusted EBITDA Margin of 41%
Increased mining capacity by 19.6%
Repaid $5.3 million of outstanding debt
Net income of $2.1 million
Q2 2020 Mining profit margin of 6%
71.71m USD market cap with 952000 TH/s.
price for 1 TH/s is 75.3$
Argo Blockchain
Argo Blockchain plc, and its subsidiary Argo Blockchain Canada Holdings Inc., are involved in the digital currency mining services worldwide. GoSun Blockchain Limited renamed itself to Argo Blockchain n December 2017. Argo Blockchain was established in 2017, and its headquarter is in London, United Kingdom.
Ticker: ARB
Exchange: LON
Stock Price: 5.5 GBX
Market Cap: 16.2m GBP = 21.3m USD
Debt: 3.83M GBP (2019 Annual Financials)
Mining:
Hash power: 730 PH/s
Energy consumption: 31 MW
Watts per 1 TH/s: 42.6 kW
Machines:
1750 Bitmain Z11
1,000 Bitmain Antiminer S17+
3,616 Bitmain Antminer T17
10,000 Bitmain Antminer T17s
Financial highlights 2019:
Revenue increased by 11-fold to £8.62 million (just over US$11 million) (2018: £0.76m)
Gross margin increased to 35% (2018: -54%)
Operating loss reduced by 80% to £0.83m (2018: £4.14m loss)
EBITDA amounted to £1.39m (2018: £3.66m loss)
Net loss attributable to shareholders declined to £0.69m (2018: £4.12m loss)
More highlights:
Equihash mining capacity is 280 megasols algorithm used to mine zcash, a popular alt-coin. It produces around 5% of worldwide total ZEC hash power.
Argo generated £6 million ($7.67 million) in revenue for three months (2020).
April 2020: revenue £1.8 million ($2.39 million), mining margin of approximately 39%. As of April 28, 2020, Argo held £1.5m cash and £0.8m in cryptocurrencies based on yesterday's closing price. The short-term loans outstanding at the year-end are on track to pay entirely in June 2020
May 2020: revenue £1.93 million ($2.58 million), mining margin of approximately 34% (block reward halving happened on May 11)
June 2020: revenue £1.41 million ($1.88 million), mining margin of roughly 27%
first half 2020: revenue £11.14 million ($14,52 million), more than the full year 2019
July 2020: revenue £1.25 million ($1.67 million), mining margin of approximately 34%
August 2020: revenue £1.49 million ($1.97 million), mining margin of roughly 44%
0.78x Price to Book (PB) ratio
21.3m USD market cap 1/8 to ZCash mining = 2,662,500$ with 280000 kSol/s.
price for 1 kSol/s is 9.50$
21.3m USD market cap 7/8 to Bitcoin mining = 18,637,500$ with 730000 TH/s.
price for 1 TH/s is 25.53$
Summary
Okay, that was the most challenging part of my hard work and study. Now comes the summary of those valuations and visions of each company. And I have already decided during this investigation that I will indeed buy shares from the most promising company I will find at the end of the day. All reasoning why, and value estimates of these companies, plus of course, their track record of handling things was mine, SO THIS IS NOT financial advice to you, dear readers. It is my conclusion of it, and my actions after it.
All of these companies' future profits depend on how the overall cryptocurrency market develops. Some of the companies were too much in debt, companies' main mining power will be installed next summer, so it is too early to see how their operations are working now. So the decision was relatively easy for me, Argo has paid their debts, and their current price for shares is relatively low compared to four other companies. After all, numbers don't lie, and Argo's price per TH/s was the lowest. And here is a comparison sheet for the company's capital per bitcoins mined.
Bitfarms price for 1 TH/s is 30.96$
Marathon Patent Group price for 1 TH/s is 58.20$
Riot Blockchain price for 1 TH/s is 73.7$
Hut 8 Mining price for 1 TH/s is 75.3$
Argo Blockchain price for 1 TH/s is 25.53$
Because my view of the coin market is bullish, I ended up to buying 18.500 Argos shares.
This kind of study was so thrilling that please send me more inquiries and ideas about what kind of reviews and articles you want me to write and find out. There are no limits what CryptoGandalf will do for you :-)
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